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Short Summary
Geopolitics is now the strongest force shaping global agricultural markets. From tariff wars to subsidy races, agricultural commodities are increasingly influenced by political strategies rather than pure supply-demand fundamentals. As we move into 2026, major shifts in trade flows, production decisions, and price trends will continue to reshape how global agri commodities are traded.
Geopolitics driving the future of agri markets
Geopolitics will continue to dominate the global agriculture markets throughout 2026. According to RaboResearch, the world is entering a new phase where agricultural trade flows, production decisions, and commodity prices are dictated more by political alliances—particularly between the United States and China—than by traditional market dynamics.
Agricultural exports have increasingly become “pawns on a geopolitical chessboard,” with tariff wars and subsidies reshaping long-established trade patterns. The result is a fragmented, policy-driven global food system.
Trade wars restructuring global agriculture
Trade wars have moved beyond simple tariffs. Trade policies have evolved into a global subsidy race, with governments in the US, Brazil, Indonesia, Argentina, and Russia introducing aggressive agricultural support programs. These include:
- Direct payments to farmers
- Minimum price guarantees
- Biofuel mandates
The rise of such interventions has muted farmer responses to low prices and is likely to maintain high planted acreage globally. As a result, grain and oilseed prices may remain subdued in 2026.
Agriculture responding to shifting geopolitical alliances
Agriculture is increasingly shaped by political considerations. Anticipating tension with China, US farmers reduced soybean plantings to their lowest levels in six years, while corn acreage reached its highest since the 1930s. By late 2025–26, this will lead to excessive US corn stocks, lowering volatility and keeping markets stable but under pressure.
Price gaps between exporting regions are also widening due to tariffs and trade barriers. Before the Trump-Xi agreement, Brazil’s soybean export basis was higher than that of the US Gulf. These differences have narrowed but are expected to remain volatile as new barriers emerge.
Markets preparing for global wheat surplus
Markets will see a significant wheat surplus in 2025–26—the first in six years—with production rising by 25 million tonnes. Yet current low prices (around $5.33 per bushel) are expected to reduce planted area, leading to a projected deficit in 2026–27.
Cheap corn will continue to cap wheat prices unless geopolitical tensions or extreme weather events disrupt supply.
Prices across other major commodities
Prices for several key agri commodities will follow their own geopolitical and market-linked trajectories:
- Palm oil: Supply deficits expected to continue
- Corn: Growing US stocks but rising headwinds from policy changes
- Sugar: Surplus production may put downward pressure on prices
- Soybeans: Outlook limited by geopolitical risks and trade uncertainty
- Soymeal: US inventories increasing, affecting global pricing
Conclusion: geopolitics will define agriculture in 2026
Geopolitics—not supply-demand balance—will remain the dominant force steering global agricultural markets in 2026. Tariffs, subsidies, trade alliances, and government policies are reshaping how commodities are produced, priced, and exported. As countries position themselves strategically, global agri traders must navigate an increasingly complex and politically influenced landscape.